NAIROBI, Kenya June 15-The Kenya Revenue Authority increased its revenue by almost Sh1billon in 2021 as a result of adopting the (exchange of information) EOI unit which assists jurisdictions tackles tax evasion and illicit financial flows.
According to the Tax Transparency in Africa 2022: Africa Initiative Progress Report, Kenya’s use of EOI resulted in increased revenue gain realised with Sh130 million in 2019, Sh10.5 million in 2020, and Sh985.2 million in 2021.
“The country’s use of the EOI has steadily increased from 1 request in 2018 to 17 in 2019, 73 in 2020, and 173 in 2021 and this is to increase in 2022,” the report noted
Kenya committed to the EOI in 2014 and has committed to starting its first automatic exchange of financial account information in September 2022 to further increase revenues.
In the year ending June 2021, KRA exceeded its revenue collection target, raising Sh1.669 trillion versus an initial target of Sh1.652 trillion.
According to the report, Kenya had the highest number of investigation requests at 173 in 2021, accounting 45 per cent of all requests sent by African countries.
It estimates that African countries have realized over $1.3 billion of additional revenues in the last eight years, comprising of tax, interests and penalties through offshore tax investigation partly conducted by EOI requests.
Launched in 2014, the Africa Initiative Working Group chaired by KRA Commissioner General Githii Mburu, ensures member states are equipped with EOI unit, tracking systems, Competent Authorities (CA) delegation and EOI manual to combat tax evasion.
“I wish to applaud the members of the Africa Initiative for their commitment and resilience in implementing tax transparency standards during the difficult times occasioned by the COVID-19 pandemic,” said Mburu.
While showing swift and positive developments, the report points out uneven progress across the region.
Four countries alone accounted for 92 per cent of all requests sent by African countries in 2021; and four from the six countries assessed in the second round of EOIR peer reviews so far were rated partially compliant, showing common difficulties in the implementation of the EOIR standard, which includes advanced beneficial ownership requirements.
“The Global Forum will pursue and intensify its efforts to actively promote the transparency agenda in Africa,” said Zayda Manatta, Head of the Global Forum Secretariat.
“We look forward to helping further develop local capacities, for example through our Train the Trainer programme, to achieve more transparent tax systems for the benefit of all African countries and their citizens.”
